Two planes crashed into the twin towers of the World Trade Center in New York - where thousands of people work - this afternoon, causing both towers to collapse. A 'tremendous number of lives' were lost, the city's Mayor, Rudolph Giuliani, said.
In Washington, another plane crashed at the Pentagon and other targets around the country were hit in what appeared to be a coordinated attack. US President George W Bush called it an 'apparent terrorist attack.'
The euro and the price of oil rose sharply but European stocks markets plunged in response to the World Trade Center attack. The euro rose to 0.9127 dollars from 0.8975 dollars before the crashes.
In London the price of oil jumped by over $3. A barrel of Brent quality North Sea oil was being quoted at $31.05 from $27.26 before the crash - its highest level since December.
'Oil stocks are going through the roof because people are worried about shortages. This is absolutely the last thing we needed at the moment,' said one European analyst. 'The implications of this are just scary. It looks like an act of war against the US.'
The London FTSE, which plunged by 5.7% - its biggest one day fall since October 1987 - was evacuated as a precaution but trading was continuing, stock exchange authorities said following the attack on the Trade Center. The LSE said that it had back-up arrangements to ensure that trading could continue while the building was closed.
European stocks, which had begun to show signs of recovering from the severe correction of the last 12 months, closed sharply down. The Frankfurt DAX index fell by 9% - its lowest level since mid-October 1998. The CAC 40 index in Paris was down by over 7% to levels not seen since March 1999.
Dublin's ISEQ index was also down by almost 3.5% - losing about £2 billion in value - today. European insurance stocks were the hardest hit by the news from New York, the sector dropping 4.45%, while energy stocks jumped 5.26%.
Nasdaq officials this evening confirmed that the Nasdaq and the American Stock Exchange would not open. New York Stock Exchange officials were not immediately available for comment. The NYSE said earlier that the start of trading had been delayed indefinitely, while the Nasdaq had pushed back its opening.
Gold also surged in Europe this afternoon as buyers were panic buying in bullion. 'The markets have started to close and this is a reaction to the unknown. Nobody knows what will happen over the next few hours and people have begun to panic,' one trader said.
Gold bullion jumped more than $6, or 2%, to $278.00/280.50 a troy ounce, from a New York close of $271.40/271.90 on Monday, after two planes hit the towers.
The trading floor of the New York Mercantile Exchange (NYMEX) has also been evacuated after the two explosions at the Trade Center, which is adjacent to the NYMEX facility.
NYMEX, the world's largest physical commodities exchange, is located in the World Financial Center, which is about a block away from the burning buildings. Commodity trading in the New York Board of Trade (NYBOT) has also been suspended in the Trade Center.
New York's landmark World Trade Center was one of the world's largest commercial complexes and had already been the target of attack. In 1993, a massive car-bomb explosion damaged portions of the complex, which houses businesses, government agencies and international trade organisations, killing six people and causing over $300 million in damages.
The building comprised two majestic 110-story twin rectangular towers, one rising to 414 metres and the other to 417 metres. They were struck within 18 minutes of each other.
American Airlines has confirmed that two of its jets carrying a total of 156 passengers and crew were lost in the attacks on the World Trade Center and the Pentagon.
American said in a statement the flights were a Boeing 767 en route from Boston to Los Angeles with 81 passengers, nine flight attendants and two pilots; and a Boeing 757 operating from Washington to Los Angeles with 58 passengers, four flight attendants and two pilots.
* The Department of Foreign Affairs has set up a hotline for people who may be concerned about relatives or loved ones in New York. The numbers are 1800 401 800 & 1800 385 858. There is also a US number for enquiries: 001 202 646 2500.
